Frequently Asked Questions

GENERAL

• What qualifies a plan as a High Deductible Health Care Plan (HDHP)?
   
• What are the key HSA benefits for employers?
   
• What are the key HSA benefits for employees?
   
• What advantages does a Chase HSA offer?
   
• What are the HSA contribution limits for 2012?

SETUP AND ENROLLMENT
 

• What tools are available to help educate employees and encourage enrollment?
   
• How does our company actually enroll employees?
   
• How quickly will my employees’ HSAs be opened?

FUNDING
 

• What funding options are available to employers?
   
• What funding options are available to employees?
   
• How do I ensure that funds are in the account on the program start date?
   
• How much do employers typically contribute to HSAs?
   
• Do HSA contributions have to be made in equal amounts each month?
   
• As an employer, do I have to contribute the same amount to every employee’s HSA?
   
• Our company offers benefits through a Section 125 plan. Do contributions have to be comparable under these plans as well?
   
• Our company wants to offer "matching" contributions, can we do that?
   
• Can employees roll over a prior MSA or HSA?

USING HSAs
 

• How will employees access their funds?
   
• How will they know what medical expenses qualify?
   
• Will employees need to verify that they use funds for qualifying medical expenses?
   
• How will employees keep track of their HSA balances and account activity?
   
• What if an employee stops contributing?
   
• What happens if an employee leaves?
   
• What happens if we decide to stop offering a High Deductible Health Plan?
   
• Can my employees close their accounts at any time?

GENERAL
 

What qualifies a plan as a High Deductible Health Care Plan (HDHP)?
An HDHP features higher annual deductibles than traditional health plans. For 2012, an HDHP must have a minimum deductible of $1,200 for individuals and $2,400 for family coverage, and a maximum deductible of $5,950 for individuals and $11,900 for families. If your plan features deductibles within this range, you have a qualifying HDHP and can implement a Health Savings Account for your company.

What are the key HSA benefits for employers?
 

• Reduce costs - Control rising healthcare costs with lower cost health insurance programs.
   
• Attract and retain employees - Offer employees an important new healthcare benefit that gives them greater control, choice and flexibility.
   
• Reduce tax liability - Payroll deductions are tax-free, which reduces FICA Medicare and Social Security tax liabilities.
   
• Reduce administration - Employees own the accounts, so employers are not responsible for authorizing medical payments.
   
• Promote employee health - Create ongoing awareness of healthy lifestyle choices.
   
• Increase enrollment in your High Deductible Health Plan - An HSA will make your plan more attractive by helping employees pay for deductibles and uncovered medical expenses with pre-tax dollars.

What are the key HSA benefits for employees?
 

• Savings
  
  • HDHP premiums are typically less expensive than traditional health insurance
     
  • Contributions, distributions, interest and investment earnings are tax-free
     
  • Account funds can be carried over from year to year
     
  • Accounts can grow through investment earnings, just like an IRA
     
• Flexibility
  
  • Convenient access to tax-advantaged health savings
     
  • Pay for medical expenses that may not be covered by health insurance, such as vision care, dental and orthodontic services and long-term care insurance
     
  • Pay for COBRA premiums and health insurance while receiving unemployment benefits
     
• Choice and Control
  
  • Accounts are owned by the individual, not the employer
     
  • HSAs are portable - employees keep their HSAs even if they change jobs

What advantages does a Chase HSA offer?
 

• An FDIC-insured, interest-bearing cash account with competitive interest
   
• A VISA debit card that is accepted at thousands of ATMs and points of sale
   
• Convenient Online Bill Pay
   
• Flexible funding options for employers and accountholders
   
• Optional HSA Investment Account (for accountholders with at least $2,000 in balances) with no trading fee for online trades
   
• Option to apply for an integrated line of credit to provide a safety net for unanticipated healthcare expenses
   
• Online access to transaction history and balance information
   
• 24-hour customer service by phone

What are the HSA contribution limits for 2012?
You and/or your employees may contribute up to a total of $3,100 for individuals and $6,250 for families in 2012. Individuals 55 and older can also make "catch up" contributions of $1,000 annually until they enroll in Medicare.

SETUP AND ENROLLMENT
 

What tools are available to help educate employees and encourage enrollment?
As part of the set-up process, J.P. Morgan will provide you with comprehensive pre-launch program support that includes marketing and communication tools to help educate both you and your employees on the HSA. We’ll provide materials such as:
 

• Videos
   
• Online Calculators
   
• Poster templates
   
• Buckslip templates
   
• E-mail/newsletter content
   
• Brochures
   
• Fliers

How does our company actually enroll employees?
We will supply a unique URL that provides your employees with the opportunity for easy online HSA enrollment.

How quickly will my employees’ HSAs be opened?
Per federal regulation, J.P. Morgan is required to validate each applicant’s name, address, Social Security Number and date of birth as part of the Customer Identification Program (CIP) process. In most (but not all) cases, this is a quick and simple process that should take no more than a few days. When completed, we will open individual HSAs for your qualifying employees and mail each employee a Welcome Kit containing their HSA account numbers, debit card and detailed instructions.

FUNDING
 

What funding options are available to employers?
Funding options available to employers include:
 

• Individual ACH credits
   
• ACH credits with bulk files or Excel templates
   
• Check & paylist

What funding options are available to employees?
Employees can initiate one-time or recurring electronic funds transfers from any personal checking account from the HSA website, or send a check and HSA deposit slip by mail.

How do I ensure that funds are in the account on the program start date?
Initial funding will be initiated on the HSA effective date and will be available for use two days after the effective date. If employees need to make qualified medical expenditures before funds are available, they can pay for the expenses out-of-pocket and then reimburse themselves with their HSA funds as soon as they become available.

How much do employers typically contribute to HSAs?
The choice is yours. Many employers find that an initial deposit or a program of matching payments improves HSA enrollment dramatically, particularly when making the transition to a High Deductible Health Plan. Approximately 50% of employers make some contribution to employee accounts.

Do HSA contributions have to be made in equal amounts each month?
No, you can contribute in a lump sum or in any amounts or frequency you wish. However, keep in mind that the funds belong to the employee after they are deposited.

As an employer, do I have to contribute the same amount to every employee’s HSA?
Employer contributions must be "comparable," which means they must be in the same dollar amount or same percentage of the employee’s deductible for all employees with the same category of coverage (e.g., "self-only" or "family"). You can also vary the level of contributions for "full-time" vs. "part-time" employees. Employees covered by a collective bargaining agreement are not covered by the comparability rules if health benefits were part of the agreement. You do not need to consider employees who do not have HDHP coverage as they are not eligible for HSA contributions.

Our company offers benefits through a Section 125 plan. Do contributions have to be comparable under these plans as well?
Section 125 plans (also known as "salary reduction" or "cafeteria" plans) must meet a different set of rules. Under these plans, contributions (both from employer and/or employee) must meet "non-discrimination" rules. These rules require the employer to ensure that contributions do not favor higher compensated employees.

Our company wants to offer "matching" contributions, can we do that?
Yes, but your company can only offer "matching" contributions through a Section 125 plan. Remember that the non-discrimination rules still apply.

Can employees roll over a prior MSA or HSA?
Yes. Your employee may request a rollover form by downloading it from the website or by calling Customer Service at the number on the back of their HSA debit card.

USING HSAs
 

How will employees access their funds?
Your employees will have a wide range of convenient options, including:
 

• An HSA debit card that they can use at doctors’ offices, pharmacies, and even at ATMs
   
• Online Bill Pay, available through the Chase HSA website
   
• Check payments (optional)

How will they know what medical expenses qualify?
Their Welcome Kit will provide a comprehensive listing of

• Contact lenses and eyeglasses
   
• Dental fees
   
• Hearing aids
   
• LASIK eye surgery
   
• Psychotherapy

Will employees need to verify that they use funds for

How will employees keep track of their HSA balances and account activity?
Your employees will have access to monthly online statements that track account balances and activity. If they take advantage of our investment option, they will also be mailed an investment account statement quarterly. All accountholders will also receive detailed tax statements at the end of the year.

What if an employee stops contributing?
There is no minimum annual contribution required, so the HSA will continue to function as long as there are funds in the account.

What happens if an employee leaves?
Once notified by the employer, we will remove the account from under your program and establish it as a stand-alone account. Your ex-employees can keep the funds at Chase indefinitely, or roll over these funds to a new HSA provided by a different HSA custodian.

What happens if we decide to stop offering a High Deductible Health Plan?
Employees will no longer be able to make contributions to their account, but may continue to access the HSA funds to pay for qualified healthcare expenses.

Can my employees close their accounts at any time?
Yes, but tax penalties may apply, so your employees should consult their tax advisors for further information. Employees can roll over funds into another HSA at any time without penalty.